Law firm repays Housing Authority for money spent without approval

By Mike Glenn

Updated 1:54 am, Friday, December 28, 2012

The cash-strapped Harris County Housing Authority will recover almost $774,000 from a law firm hired to do research for a contractor under a mediated settlement approved Thursday.

The legal dispute stemmed from research the law firm Haynes and Boone did in 2008 and 2009 for consulting firm McConnell Jones Lanier & Murphy on a hurricane recovery project. The consultants' contract with the housing authority, however, authorized no more than $25,000 to be spent without approval from the authority's board.

McConnell Jones Lanier & Murphy collected $11.3 million, with the law firm receiving $773,731. There is no record the board ever approved payments of this amount.

"This matter was never about the quality of the legal work provided by Haynes and Boone, but was instead about the process under which our contractor authorized that work," housing authority board chairman Beto Cardenas said in a statement.

While the mediation agreement notes neither party in the lawsuit admits liability, it said the dispute was "due to a misunderstanding regarding the contracting process," and that Haynes and Boone agreed to refund the legal fees.

"We are pleased that we were able to resolve these issues to everyone's satisfaction," Terry Conner, Haynes and Boone's managing partner, said in a statement. "Haynes and Boone has a longstanding professional relationship with (the housing authority) and we value our leadership role in the Houston business community."

The legality of the contracting arrangement also was in question because former Haynes and Boone partner Casey Wallace was chairman of the housing authority at the time the payments were made and did some of the legal work himself.

In February, Wallace was replaced as housing authority chairman. He left Haynes and Boone in July.

On Thursday, Cardenas said he considered the dispute with Haynes and Boone resolved and praised the firm's professionalism.

He said the board is continuing its efforts to straighten out the agency's overall financial situation: "We take our obligations seriously."